The iPhone Won't Make or Break Apple

Apple has to deliver more than tweaks to its phone to get investors to believe again.

NEW YORK ( TheStreet) -- Apple ( AAPL) shares are beginning to rebound, up almost 2% (as of this writing) after another recent decline that placed the stock on the brink of another 52-week low.

Apple is still the cheapest stock on the market. While the company will likely hold that title for the rest of the year, I do worry the Street is still putting too much of the company's success -- or for that matter its valuation -- on the possibility of a new iPhone.

Case in point: The stock surged almost 3% last week immediately after Brian Blair, analyst at Wedge Partners, said Apple willl release its new phone, presumably called the "iPhone 5S" to China Mobile ( CHL) this July. In a note to investors, Blair wrote:

"We believe that Apple will launch the iPhone 5S at China Mobile this July, as it launches the next iteration of the iPhone globally. We believe this handset will be a TD-SCDMA model of the iPhone 5S and will likely begin production next month.

"The announcement of China Mobile will be meaningful for Apple iPhone units, as Apple has yet to direct-sell its iPhone to the carrier and its 710 million subscribers. In addition to China, India is another market that we believe Apple is working to tackle this year, and we understand the company is deploying significantly more people in the nation this year in an effort to grow iPhone/ iPad sales."

That's all well and good. But how much will and should it matter?

I'm not suggesting the iPhone, which is Apple's highest-margin product, is not important. But analysts have been making all sorts of predictions for the past two years. This is despite the company remaining secretive on these matters. Besides, investors might fall into the trap of raising expectations only to get disappointed.

We saw this with the iPhone 5, which was only incrementally better than the iPhone 4S. It's worth asking how much of a difference a new phone can make to the state of Apple today, especially since the quality gap Apple once enjoyed over its rivals -- particularly Samsung, has been shrinking.

Also, given the lack of excitement on the Street in BlackBerry's ( BBRY) new phone, Apple has to blow the market's mind just for its device to be considered good.

This is not another indictment on Apple. But the point is, the company is more valuable than what a new phone might reveal. Instead of looking at all of the possible markets that Apple will enter in the coming years, the Street continues to appraise Apple on how fast the gap is closing with its competition. Investors shouldn't fall for it.